District Consumer Disputes Redressal Commission ,Faridabad.

Consumer Complaint  No. 223/2021.

 Date of Institution:13.04.2021.

Date of Order: 13.02.2024.

M/s. Hindrays, 60/34, Industrial Area, NIT, Faridabad – 121001 Haryana through its Proprietor Mr. Ram Pratap Gaur.

                                                          …….Complainant……..

                                                Versus

1-                HDFC Bank Limited. 1-2 Chowk, Tikona Park, NIT, Faridabad Haryana 121001 Through its Manager

2-                HDFC Bank Limited, Senapati Bapat Marg, Lower Parel (West) Mumbai through its MD/ Director/Manager.

                                                                   … …Opposite parties……..

BEFORE:            Amit Arora……………..President

Mukesh Sharma…………Member.

Indira Bhadana………….Member.

PRESENT:                   Sh.  Kunnal Kant Sharma,   counsel for the complainant.

                             Sh.   Lalit Vashisth,  Counsel for opposite parties Nos.1 & 2.

ORDER:

                             The facts in brief of the complaint are that the complainant firm was covered under (M.S.M.E.) Medium Small Micro Enterprises. The complainant firm was having O.D. Bank Account No. 50200024456609 with the respondent No.1 Bank.  The complainant taken the business loan of Rs. 1,13,00,000/- from the respondents vide application No. 0109018 vide proposal No. 82499193 which was sanctioned vide sanction Letter dated 22-03-2017. At the time of sanctioning of the above said loan amount the respondents had obtained the signatures of the complainant on some Printed proformas, agreement etc. also taken blank signed Cheques from the complainant. The said loan amount was repayable by the complainant firm to the respondents within the period of 144 monthly installments @ Rs. 1,32,967/- per month. Thus the complainant firm was the consumer of the respondents as defined under the relevant provisions of the Consumer Protection Act, 2019 as amended upto date.  The complainant firm found that the respondents had imposed heavy rate of interest over the principal amount of loan. Hence the complainant firm requested the respondents for foreclosure of the said loan amount. The respondents agreed for the foreclosure of the said loan amount and the respondents deducted prepayment foreclosure charges i.e. 2,92,309/- at the rate of interest 2.95% on outstanding principal from the Bank account of the complainant firm illegally and unlawfully. The respondents issued the letter dated 17-12-2020 to the complainant firm in this regard.   The complainant firm was covered under MSME and Code of Bank's Commitment to Micro & Small prepayment of gloating rate loans without levying any prepayment penalty. The complainant sent various email letters to the respondents and Manufacturers Association Regd. Faridabad sent the letter to the respondents requested the respondents to refund of closing charges. Thus after receiving the said letter the respondents have not given any letter to the complainant firm.   Thereafter the complainant firm sent various email letters to the respondents to refund the foreclosure charges I.e. 2,92,309/- at the rate of interest 2.95% on outstanding principal taken by the respondents to the complainant firm. As per the above said Code of Bank's committeemen to Micro Small Enterprises the respondents have no right to collect the said amount from the complainant firm.  The aforesaid act of opposite party amounts to deficiency of service and hence the complaint.  The complainant has prayed for directions to the opposite parties to:

a)                refund the prepayment foreclosure charges i.e. 2,92,309/- at the rate of interest 2.95% on outstanding principal to the complainant firm alongwith interest @ 24% per annum from the date of deducting the said amount upto date jointly or severally

 b)                pay Rs. 2,00,000/- as compensation for causing mental agony and harassment .

c)                 pay litigation expenses.

2.                Opposite parties put in appearance through counsel and filed written statement wherein Opposite parties refuted claim of the complainant and submitted that  the OP No. 1 & 2 i.e. HDFC Bank Ltd (hereinafter referred to as "OP Bank") was approached by the Complainant i.e. a Proprietorship Firm through its Proprietors ie. Mr. Ram Pratap Gaur and Ashish Gaur (Co-borrowers). The Complainant's had approached the OP Bank seeking a transfer of Secured Loan from Syndicate Bank to OP Bank. A duly filled and signed Application Form dated 10.03.2017 was submitted in this regard. It was pertinent to note that details w.r.t the Loan and the applicability of Pre-Payment charges were duly stated in the Application Form dated 10.03.2017 and the Complainant and the Co- Borrowers had duly received the same.  The OP Bank thereafter, issued a Sanction Letter dated 22.03.2017 to the Complainant and the Co-Borrowers w.r.t the Secured Loan in question. The Sanction Letter dated 22.03.2017 duly stated the details of the Loan and the Pre- Payment charges if the Loan was foreclosed. The Complainant and the Co- Borrowers duly received the details and thereby stamped and signed the Sanction Letter.   The Loan Agreement dated 29.03.2017 was duly executed between the parties after verifying the credentials and financial status of the Proprietorship Firm and only after the Sanction Letter dated 22.03.2017 (also containing the details of Pre- Closure charges) was duly received by the Complainant, Co-Borrowers. The said Loan Agreement was for granting Secured Loan Against Property (hereinafter referred to as "said Loan") which was duly stamped by the Complainant i.e. Proprietorship Firm, Mr. Ram Pratap Gaur and Ashish Gaur as Co-borrowers. The details/terms, which was duly received and acknowledged by the Complainant, are detailed below:

The Complainant and Co-Borrowers were made well aware about the different terms and conditions in relation to the Loan Agreement. The terms and conditions of the Loan Agreement were readout and explained to the parties. It was pertinent to note that the Schedule dated 29.03.2017,Sanction Letter dated 22.03.2017 was duly stamped by the Complainant Company's Stamp and signed by the Co-Borrower/Guarantor. It was only after understanding the nitty gritty of the said agreement had the Complainant and Co-Borrowers had stamped and signed Loan Agreement dated 29.03.2017.  It was submitted that timely payment of EMI's was essence of the Loan Agreement and the parties to Loan Agreement had agreed for the timely payment of EMI's. However, the Complainant and Co-Borrowers were defaulters in making the timely payment of EMI's. This Ld. Commission may note that a total of 6 cheques presented by the Complainant and Co- Borrowers bounce and the same was duly reflected in the Statement of Account (hereinafter refered to as "SOA") placed on record. The OP Bank seeks liberty of the Ld. District Commission to refer and rely on the terms and conditions of the Loan Agreement apart from the above, at the time of adjudication of the present matter.  Thereafter, the Complainant and Co-Borrower approached the OP Bank in December 2020 seeking for pre-closure of the Loan Account. Upon the request of Complainant and Co-Borrower the OP Bank in compliance of the RBI Circular and Guidelines provided a Foreclosure Letter dated 17.12.2020 wherein the Complainant was asked to make payment upon the Loan Account should be closed. Thereafter, once the Complainant and Co-Borrower made the payments on 13.01.2021 and the Loan Account was closed by the OP Bank (same is reflected in the SOA). This Ld. District Commission may appreciate that the Complainant has filed the present Complainant alleging that the OP Bank has wrongly levied the Pre- Payment Charges and had stated that despite many e-mails the OP Bank never provided resolution to the Complainant. In this regard it was submitted that the OP Bank had duly reverted to the e-mails of the Complainant dated 06.02.2021 via email dated 26.03.2021 where the Complainant was duly informed that "Your request for waiver-off pre-payment charges has been reviewed and declined as pre-payment charges are applicable as per agreed terms in respective agreement only". In view of the above it was evident that the OP Bank had duly reverted and explained that the Complainant was liable to pay pre- payment charges as per the Agreement.  This Ld. District Commission may appreciate that the Complainant has filed the present Complainant alleging that the OP Bank has wrongly levied the Pre- Payment Charges. However it was pertinent to note that the Complainant and Co- Borrowers were well aware about the Pre-Payment Charges stated in the Loan Application Form, Sanction Letter dated 22.03.2017 and it was only after that the Loan Agreement (duly filed and signed - not disputed) was executed between the Parties. The Complainant and the Co-Borrowers have agreed to be bound by the terms & conditions.  As per the Loan Application Form, Sanction Letter dated 22.03.2017 and Clause 6 of the Loan Agreement dated 29.03.2017 entered between the parties the Complainant has agreed for foreclosure charges on the said Loan Account.  This Ld. District Commission may also appreciate that the Complainant's allegations were not sustainable in view of the fact that the OP Bank had duly complied with the RBI Guidelines and Circular and thereby levied the Pre- Closure Charges in 2020 when the Complainant sought for Pre-Closure of the Loan Account. The Bank acted in compliance to the RBI Master Direction dated 21.07.2016, bearing number RBI/FIDD/2016-17/37 Master Direction FIDD MSME & NFS3/06.02.31/2016-17 (hereinafter referred to as "RBI Master Direction 2016"); and RBI Circular dated 02.08.2019 bearing number RBI/2019- 20/29 DBR.Dir.B.C.No.08/13.03.00/2019-20 (hereinafter referred to as "RBI Circular 02.08.2019"). As per the RBI Master Direction 2016 it was specifically stated that the Banking Codes and Standing Board of India has formulated a Code of Bank's Commitment to Micro and Small Enterprises. Thereafter it was also stated that "the Code dose not replace or supersede regulatory or supervisory instructions issued by the RBI the Banks will comply with such instructions/directions sued by the RBI from time to time.". Vide the RBI Circular dated 02.09.2019 the RBI has further clarified that the Banks shall not charge foreclosure charges on any floating rate term loan sanctioned except for loan for business, to individual or with co-obligants. The Loan Facility in question was availed by the Complainant Proprietorship Firm (dealing in business of whole sale trade) le Co-Borrower for Business expansion and the foreclosue was sought in the year 2020.  Opposite parties denied rest of the allegations leveled in the complaint and prayed for dismissal of the complaint.

3.                The parties led evidence in support of their respective versions.

4.                We have heard learned counsel for the parties and have gone through the record on the file.

5.                In this case the complaint was filed by the complainant against opposite parties–HDFC Bank with the prayer to: a)  refund the prepayment foreclosure charges i.e. 2,92,309/- at the rate of interest 2.95% on outstanding principal to the complainant firm alongwith interest @ 24% per annum from the date of deducting the said amount upto date jointly or severally. b) pay Rs. 2,00,000/- as compensation for causing mental agony and harassment . c)  pay litigation expenses.

                    To establish his case the complainant  has led in his evidence,  Ex.CW1/A – affidavit of Ram Pratap gaur Proprietor M/s. Hindrays 50/34, Industrial area, NIT, Faridabad, Ex.C-1 – letter, Ex.C-2 – sanction letter dated 04.01.2021 alongwith statement of account,  Ex/C3 – letter dated 17.12.2020, Ex.C-4 – Code of Bank’s Commitment to Micro and Small Enterprises, Ex.C-5 – letter dated regarding request for refund of closing charges,, Ex.C-6 & 7 – emails.

                    On the other hand counsel for the opposite parties strongly agitated and opposed.  As per the evidence of the opposite parties Ex.RW1/A – affidavit of Bharti Thakur , Authorized Officer of HDFC Bank Ltd., Senapati Bapat Marg, Lower Parel (West) Mumbai, Ex.R-1 – resolution,, Ex.R-2 – Loan application form, Ex.R-3 – Sanction letter,, Ex.R-4 – loan agreement,, Ex.R-5 – statement of account, Ex.R-6 – email dated 26.03.2021., Ex.R-7  letter dated July 21,2016 regarding Master Direction- Lending to Micro, small & Medium enterprises (MSME) Sector. 

6.                In this case, the objection taken by the opposite parties that this case is a commercial in nature.  The complainant taken the MSME loan from opposite parties which does not fall within the ambit of Consumer as defined under section 2 (1) (d)(i) of the Consumer Protection Act, 1986.  After going through the evidence led by the parties as well as the objection taken by the opposite parties, the Commission is of the opinion that this is a MSME loan which was taken by the complainant in crore. As per Section 34 of the Consumer Protection Act, 2019 the District Commission has a pecuniary jurisdiction of matters not exceeding one crore rupees. 

Section 34(1)”Subject to the other provisions of this Act, the District Commission shall have jurisdiction to entertain complaints where the value of the goods or services paid as consideration does not exceed one crore rupees: Provided that where the Central Government deems it necessary so to do, it may prescribed such other value, as it deems fit.”

7.                Keeping in view of the above submissions, the Commission is of the opinion that the complainant has failed to prove his case.  Hence, the complaint is dismissed.  Copy of this order be given to the parties concerned  free of costs and file be consigned to record room.

Announced on:  13.02.2024.                                (Amit Arora)

                                                                                  President

                     District Consumer Disputes

           Redressal  Commission, Faridabad.

                                                          (Mukesh Sharma)

                Member

          District Consumer Disputes

                                                                                  Redressal Commission, Faridabad.

                                                             (Indira Bhadana)

                Member

          District Consumer Disputes

                                                                                Redressal Commission, Faridabad.